Guide to Corporate Tax Rates and Profit Tax in Hong Kong (2022)
Hong Kong has the lowest corporate and profit tax rates in the world. Here’s everything your business needs to know.
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For incorporated companies:
Description
Amount
8.25% on the first HK$2,000,000
HK$0
16.5% on the remaining assessible amount
HK$0
Total tax payable
HK$0
For non-incorporated companies:
Description
Amount
7.5% on the first HK$2,000,000
HK$0
15% on the remaining assessible amount
HK$0
Total tax payable
HK$0
Description
Date
Tax filing due date
-
*For newly registered businesses, the IRD will issue your first profit tax return some 18 months after the date commencement of your business. Hence, you will have a 90-day period to file your first tax return.
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Hong Kong has the lowest corporate and profit tax rates in the world. Here’s everything your business needs to know.
Here’s an in-depth FAQ resource if you would like to learn about selling on Amazon in Hong Kong.
Accounting software can help to manage your company’s financial data as it expands. Here’s a list of the best ones available.
When you establish your business, it is crucial to determine the Financial Year End (“FYE”), which is the annual period for which a company’s accounts are closed. Not only does the FYE signify the completion of the 12-month accounting period for your company, but it also helps your company to prepare the annual financial statements.
Please contact our consultants if you are not sure about your FYE.
A company’s assessable profits are taken into consideration to determine net profits arising in or derived from within the jurisdiction for the basis period. However, it does not include profits arising from the sale of capital assets.
Assessable profits do not include:
Please contact us for more information.
In Hong Kong, profits tax exemption is available on eligible onshore and offshore funds generated within the jurisdiction. Here are some examples of tax incentives:
If you wish to have a precise tax incentive evaluation of your company, please contact us.
The annual profit tax filing due dates are different accounting to the accounting dates (i.e. the date of commencement on Business registry Certificate) of the companies:
All profits tax returns are submitted to the Inland Revenue Department (IRD) within one month of issuance. The returns depend on the type of your business:
For some, the one-month deadline is insufficient to finish their profit tax return form. But luckily, a company can request for an extension. The IRD will send out a Circular Letter at the start of the year to inform representatives about the Block Extension Scheme.
It includes programs for block extension and notifications of detailed updates.
A further extension of time beyond the Block Extension Scheme extended due dates will be given only in the most extraordinary situations.
Any such request should be given in writing, together with an explanation of why the procedure cannot be completed in a timely manner and supporting documentation.
A fine is imposed if a legal entity fails to comply with its tax duties. For instance, this could be failing to keep adequate records of income and spending, filing an erroneous return without fair cause, or failing to comply with the requirements of the notice.
The penalties and fines vary. The highest penalty is HK$50,000, a fine of three times the undercharged and three years in prison.
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